Variety Of Issues Taxing Taxpayers' Patience

With the tax-filing deadline fast approaching, consumers can be excused if they're a little cranky, especially when they feel they've encountered problems with companies providing tax services.

Candis, of Tallapoosa, Ga., went with her husband to a local H&R Block office, where they had their tax returns prepared for the last six years. Though it isn't advisable for anyone to do, Candis said they always took a Refund Anticipation Loan (RAL) so they could get their refund instantly.

"We went in and sat down with this woman and she gets our taxes done and not one time untill the very end did she say they were not doing the RAL this year," Candis said.

Candis is probably better off, though she says he needs the money now. But electronic filing and direct deposit are almost as fast as RALs were.

Mistakes

A theme of complaints about tax services seems to be mistakes that lead to additional costs for the taxpayer. Chris, of Seaford, Del., said he took his documentation to Jackson Hewitt in January of 2010 and his tax form indicated he would receive an $8,473 refund.

"Two months later the IRS and State of Maryland rejected the returns," Chris told ConsumerAffairs.com. "They said more information was needed."

Chris said when he called the Jackson Hewitt office to report the problem, he was told his preparer had been fired. In the end, the refund was readjusted to $473. Chris is still steamed because he had to pay the full tax preparation fee, which was over $400.

DIY problems

Even taxpayers who prepare their own taxes with the help of commercial software complain the results aren't always accurate. Robin, of Iowa City, Iowa, said she received a letter from the State of Iowa saying that she had been refunded too much on her 2008 state taxes.

"Iowa claimed that I had entered a $4,000 tuition tax credit, which was denied," she said. "However, when I looked at my PDF of my 2008 returns from TurboTax, everything was correct. TurboTax listed my total taxes/credits as $718 and a refund due of $529. But what Iowa received listed a tax credit and a request for a refund of $718."

Robin thinks there's a problem with the software or electronic transmission.

"What was e-filed by TurboTax was not the same as what they told me they were e-filing," she said.

Alex, of Wichita, Kan., had a similar 2008 problem with Turbotax.

IRS catches the mistake

The program took my retirement income from my 1099r, but did not include the amount as taxable income," Alex told ConsumerAffairs.com. "The IRS caught it and assessed interest on the additional taxes due. I turned to Intuit on their tax guarantee, and they responded that it was my error, not theirs."

The tax code is complicated and seems to get more so every year, meaning most taxpayers require some type of assistance in preparing their return.

That's why it is a good idea to shop around for a good, independent tax preparer or CPA that you can use year after year. That way, they become familiar with your particular situation and may be less likely to make mistakes.